BPB makes final pitch to force up St Gobain offer

Building materials manufacturer BPB will rush out its interim results on Friday in its final bid to squeeze an increased offer from French group St Gobain.

The bid timetable is expected to restart on Wednesday, when the European Commission, which has been examining the competition implications, is expected to give its clearance.

That will mean BPB has until Friday to produce new financial information and St Gobain a further week to decide whether to up its offer from the current 720p, or £4.1 billion.

BPB has argued that is far too low. In a defence document issued last week, it said its shares were worth at least 832p, based on the valuation put on Aggregate Industries when it was acquired by Holcim earlier this year.

But sources close to St Gobain argue that, based on earnings before tax, interest and depreciation, its offer values BPB at a higher multiple than Aggregate or RMC, the concrete producer that was acquired by Cemex.

In its interim results statement, BPB is expected to emphasise its growth prospects, strong cash generation and generous dividend growth. It is promising an average growth rate of 23 per cent over the next three years.

It has already said that its full-year profits will be at least £350 million, a rise of 24 per cent, and is promising to return £600m to shareholders through a share buy-back.

Most City analysts think St Gobain will have to raise its bid - although few expect it to have to go as high as BPB is demanding. Merrill Lynch last week predicted that an offer of between 750p and 760p 'would prove acceptable'.